Business Context and Reporting Period
This Form 8-K reports the completion of a business combination between Virgin Group Acquisition Corp. II (VGAC II) and Grove Collaborative, Inc. on June 16, 2022. VGAC II was domesticated from the Cayman Islands to Delaware and renamed Grove Collaborative Holdings, Inc. (New Grove). The transaction involved a two-step merger where Grove became a wholly-owned subsidiary of New Grove. The company ceased being a shell company upon closing.
Key Financial Metrics and Capital Structure
The filing details the capital raised and the resulting equity structure immediately following the closing. Specific historical revenue or profit figures for Grove are incorporated by reference to the Proxy Statement/Prospectus and are not explicitly listed in this text.
- PIPE Financing: Subscribed for 8,707,500 shares at $10.00 per share for aggregate proceeds of $87,075,000. As of closing, 8,607,500 shares were issued for $86,075,000, with the balance expected to be issued later.
- Backstop Financing:
- Tranche 1: 2,338,352 shares of Grove Common Stock purchased for $27,500,000.
- Tranche 2: 1,671,524 shares of New Grove Class A Common Stock purchased at $10.00 per share for $16,715,240.
- Warrants: Issued 3,875,028 warrants exercisable at $0.01 per share.
- Redemptions: Holders of 39,672,045 VGAC II Class A ordinary shares elected to redeem their shares.
- Exchange Ratio: Approximately 1.17604 shares of New Grove Class B Common Stock for each share of Grove Common Stock.
- Post-Closing Capitalization (excluding Employee Stock Grants):
- Class A Common Stock: 23,669,479 shares
- Class B Common Stock: 139,101,554 shares
- New Grove Warrants: 14,750,000
- Converted Warrants: 923,857
- Backstop Warrants: 3,875,028
Material Changes and Corporate Actions
The primary material change is the consummation of the Business Combination, resulting in a change of control and corporate identity.
- Corporate Name and Jurisdiction: Changed from Virgin Group Acquisition Corp. II (Cayman Islands) to Grove Collaborative Holdings, Inc. (Delaware).
- Trading Symbols: Class A Common Stock and Warrants began trading on the NYSE on June 17, 2022, under symbols GROV and GROV.WS, respectively.
- Share Conversions: VGAC II shares and warrants converted to New Grove securities. Grove shareholders received Class B Common Stock and earnout shares based on the exchange ratio, though some elected to receive Class A shares directly.
- Accounting Firm Change: The Board engaged Ernst & Young LLP as the independent registered public accounting firm, replacing WithumSmith+Brown, PC. No disagreements were reported with the former auditor.
Guidance, Risks, and Management Commentary
The filing includes standard forward-looking statement disclaimers regarding future financial performance, strategy, and market conditions. Specific guidance numbers are not provided in this text but are referenced in the Proxy Statement/Prospectus.
- Risk Factors: Risks include market changes for Grove's products, customer retention, intellectual property protection, regulatory developments regarding automatic renewal laws, and the ability to achieve projected financial performance.
- Dividends: New Grove has not paid cash dividends and does not anticipate declaring any in the foreseeable future.
- Equity Plans: The 2022 Equity and Incentive Plan (24,555,528 shares available) and the 2022 Employee Stock Purchase Plan (3,274,070 shares available) were approved and became effective immediately upon closing.
- Board Changes: Fumbi Chima was elected as a new independent director and appointed to the Sustainability, Nominating and Corporate Governance Committee.
Investor Verification Checklist
- Verify the final number of shares issued and the total cash proceeds received from the PIPE and Backstop financing, noting the "Remaining PIPE Financing" balance.
- Review the "Selected Historical Financial Information" and "Pro Forma Condensed Combined Financial Information" in the Proxy Statement/Prospectus (Exhibits 99.1 and 99.2) for specific revenue, loss, and cash flow data not detailed in this 8-K.
- Confirm the vesting schedules and earnout thresholds for the "Grove Earnout Shares" issued to former Grove shareholders and employees.
- Examine the "Risk Factors" section of the Proxy Statement/Prospectus for detailed operational and regulatory risks.
- Check the beneficial ownership table to understand the concentration of voting power, particularly regarding the Sponsor (Virgin Group) and major institutional investors like Mayfield and General Atlantic.